This week, the DailyFX Dynamic Carry Trade Basket was up by 525 pips and accumulated and additional $164 on interest payments. Even though,U.S. credit markets remain very tight, with Junk bonds spreads above 400, credit conditions have eased since August and the appetite for carry trade seems to be back. The most profitable trade we took was the long position in the Australian dollar with 264 pips gain. On the other hand, the biggest loss was taken in the short position we held in the Japanese yen (82 pips). Last week, “we decided to open a long position in the kiwi with a stop in a weekly close below 0.6500”. We also said that, “we believe the sharp decline in the New Zealand dollar since July will act as a significant boost to the economy and we expect the effects of higher commodity prices will soon be translated into stronger exports”. Since then, the New Zealand dollar has rallied 131 pips and we think we are still in the beginning of major U.S. dollar depreciation. Good luck with your trading for the week ahead!
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<B style=“mso-bidi-font-weight: normal”><SPAN style=“FONT-SIZE: 9pt; FONT-FAMILY: Arial”>Additional Information